Competitive Exams: Economics MCQs (Practice-Test 46 of 122)

When exchange rates are stable and a country at full employment has a surplus balance of payments, it will result in a

decline in price level

decline in money income

rise in price level

rise in money income

Match List I with List II and select the correct answer

List-I

List-II

C = 4 + 0.6 Y

I = 80 − 5i

0.3 y − 20 i − 150 = 0

0.3 y + 20 i − 150 = 0

LM function

IS function

consumption functions

Investment function

A

B

C

D

3

4

1

2

4

3

1

2

3

4

2

1

4

1

2

3

When income rise, the impact on the liquidity preference curve is that

it shifts to the left

it does not shift at all

it shifts to the right

there is a change in its slope

Human Development Index (HDI) is a composite index of

health, literacy and employment

national income size of population and the general price level

national income, per capita income and per capital consumption

physical resources, monetary resources and population size.

According to the Harrod-Domar model, the warranted rate of growth, given the incremental capital-output ratio, depends on the

rate of growth of labour force

marginal productivity of investment

marginal efficiency of capital

saving-income ratio

According to J R hicks, technical progress is said to be neutral if it raises

the marginal physical productivity of labour and capital in the same proportion

the average productivity of labour and capital in the same proportion

the wage ‘rate and the interest’ rage in the same proportion

the interest-rate and the profit-rate in the same proportion

According to Kuznets, during process of development the income inequalities tend to

decrease

increase

increase first and then decrease

decrease first and then increase

Perfectly elastic supplies of labour play a crucial role in

Malthus'model of growth

Kuznets'model of growth

The Prebisch hypothesis

Lewis'model of growth

Consider the following statements: The correct order of specific stages of demographic transition associated with economic development is

low birth rate with low death rate.

high birth rate with high death rate.

high birth rate with low death rate.

Which of the above statements are correct?

1, 2, 3

2, 1, 3

2, 3 1

3, 2, 1

Consider a Ricardian economy that is endowed with 45 units of labour. It can produce two goods: Gagar-halwa and Kulfi. One unit of labour can produce 4 kilos of Gajar-halwa or 6 kilos of Kulfi. The international priceof Gajar-halwa in terms of Kulfi is 2. In free trade, this country will produce.

15 kilos of Kulfi

130 kilos of Kulfi

180 kilos of Gaja-Halwa

270 kilos of Gajar-Halwa

Consider tow countries: Ghana and Zaire, Assuming a heckscher-Ohlin framework, let the total supplies of capital and labour in the two countries be Ka = 300, La = 150 for Ghana and KI = 110 and LI = 50 for Zaire. Each country produces two goods. Cocoa and Peanuts and in both countries cocoa is more labour intensive in production. The Heckscher-Ohlin theory predicts that

Zaire exports Cocoa to Ghana

Zaire imports Coca from Ghana

Zaire imports Peanuts from Ghana

both a and c will hold

If protection is given to a small importcompeting industry, consumer surplus and domestic profits will, respectively

rise, rise

Fall, fall

rise, fall

fall, rise

Which one of the following conditions is NOT assumed by the factor price equalization theorem?

the countries are characterised by different factor endowments.

the countries are characterized by different production functions

the industries are characterised by different factor intesities

Each country will export the commodity which uses its abundant factor relatively intensively.

India is large exporter of tea and a small exporter of bicycles. In this context, which one of the following is true?

An export subsidy to tea would improve India's term of trade in the world tea market

an export subsidy to tea would worsen India's terms of trade in the world tea market

an export subsidy to bicycles would improve India's terms of trade in the world bicycle market

an export subsidy to bicycles would worsen India's terms of trade in the world bicycle market

There are two countries: Sugarland and Salt land. Each country produces sugar and salt. The former exports sugar and the latter, salt. Starting from free trade equilibrium, a tariff on salt by Sugarland would affect the offer curves and the relative price of sugar from Sugarland's perspective in which one of the following ways?